European stocks rebounded on Friday and US equity futures pointed higher as a pause in bond market selling gave broader markets a breather, according to investingLive's European session wrap. It was a relatively quiet session as markets took in the calm following the retreat in bond yields from trading late yesterday — for now, at least.

Still, the bond market remains the focal point. 10-year Treasury yields had threatened a multi-decade break higher yesterday in a push to 5.35% before falling back, and are now settling around 5.25%, up 2 basis points on the day. The 10-year matters well beyond trading floors: it serves as a benchmark for borrowing costs across the US economy, from corporate debt to mortgages, and its trajectory shapes how investors size up risk assets elsewhere. While they are not moving higher, they are still very much keeping broader markets on edge. But as the bond market catches a bit of relief, broader markets are catching a bit of a breather today.

Geopolitics helped underpin the steadier tone. US President Donald Trump said he might put off attacks against Iran until after the midterm elections, which means the status quo in the Middle East will persist for a few more months at the very least. Oil prices eased as traders unwound the escalation risk premium after Trump ruled out strikes on Iran, with WTI crude down 0.9% at $90.68. That is helping to take some pressure off inflation risks as the bond market also keeps steadier today.

In currencies, the dollar traded mixed as major pairs digested the calm from the bond market. EUR/USD was flat at 1.1207, USD/JPY rose 0.3% to 158.30, and AUD/USD gained 0.3% to 0.6975, leaving the Australian dollar leading major currencies while the Japanese yen lagged on the day.

In equities, European indices bounced back modestly but still look set to end the week lower. The DAX rose 0.9% and the CAC 40 added 0.5%, pointing to a decent rebound after yesterday's sharp losses. Even so, jitters over rising borrowing costs and French fiscal risks remain key factors weighing on sentiment in Europe in the weeks ahead, with France — the euro area's second-largest economy — a natural reference point for the region's borrowing costs.

US futures held up better, with tech shares leading the bounce. That carries over some of the better mood from Wall Street's late recovery yesterday as bond market selling pauses for now. With yields coming off the boil, US stocks will be looking to capitalise and end the week on a more positive note. S&P 500 futures were up 0.4%, while Nasdaq futures gained 0.8%.

Gold erased its weekly losses as Trump ruled out attacks against Iran before the midterm elections, with the non-yielding precious metal up 1.1% at $4,180 on the pickup in broader market sentiment. For now, the $4,200 mark remains a key hurdle for gold buyers trying to establish the next leg higher, as highlighted in a recent chart review. Bitcoin also traded higher, rising 0.8% to $82,443.

Looking ahead, the Canadian jobs report for September and the Michigan consumer survey for October are the two key risk events on the economic calendar, with US inflation expectations in focus in today's Michigan consumer survey. The Michigan read is one of the most closely watched gauges of household price expectations, and one that Fed policymakers also monitor as they assess the inflation outlook. But all eyes will stay on the bond market, watching whether this perceived calm in broader markets can hold up before the semi-long weekend. A reminder for traders: the US bond market will be closed on Monday next week, though the stock market will be open — a session that leaves equities trading without the usual same-day read on Treasury yields.

Source: investingLive — European session wrap: Stocks rebound as bond market nerves ease, for now